Executives and subordinates fostered racial discrimination at work.

The white CEO, and a subordinate, fostered racial discrimination in the workplace?

This looked like a case of racial discrimination at work from Joseph Simmon’s point of view. An African-American, Simmons was brought in from the outside to the high-level post of treasurer for the Chicago Board of Education.

Almost immediately he ran into problems with a white subordinate, the lead stock trader in the treasury department. She’d been there a long time and had enjoyed autonomy making dozens of stocks trades every day. She was enraged when Simmons started micromanaging her – insisting he sign off on all her trades.

Tensions increased when Simmons learned that early on the trader had complained about him, telling colleagues she was uncomfortable working for a black man. Was it Simmons’ management style that the lead trader objected to, or was it institutional racial discrimination?

The frustrated trader went over Simmons’ head, seeking out his boss and making a business case for why Simmon’s micromanagement was counter-productive. Her job, she told the superior, required that she make quick decisions on fast-moving stocks. Tracking Simmons down 50 times a day was totally impractical and was costing the organization money.

At this point Simmons needed all the support he could get from his superiors. And that’s when things went from bad to worse.

Racial Discrimination in the workplace or bad business decisions

A few months before his appointment to the Board, Simmons made an unsuccessful bid for an alderman seat in Chicago. Right after Simmons was hired, the Board’s CEO, a white man, overheard Simmons’ opponent make disparaging remarks about Simmons. The alderman’s comments had created doubt in the CEO’s mind about the new treasurer’s ability Simmons stated in his racial discrimination lawsuit.

After the trader leveled her complaint, Simmons got a stern letter from his boss instructing him to abandon his pre-approval policy or face disciplinary action. His system, the boss said, significantly slowed the pace of the stock transactions, resulting in missed opportunities and lost revenues.

Simmons wrote back, defending his policy. Being new and accountable, he wanted in-depth knowledge of every transaction in his area. His letter went on to assure his superiors that he would discontinue the policy as they wished.

But he didn’t.

As a result, Simmons was demoted to a lower-level policy analyst position and his staff reassigned to a new manager.

Simmons filed a lawsuit for racial discrimination in the workplace, claiming his demotion was racially motivated. His subordinate had publicly aired her doubts about working for a black man, suggesting that she may have been incapable of accepting his leadership. What’s more, the CEO also seemed predisposed to make hasty judgments about him. After all, he was influenced by hearsay from his opponent in a hard-fought election.

The Board kept it simple, arguing that it demoted Simmons because he’d been insubordinate: He’d failed to comply with a directive.

The court’s decision

A U.S. district court and then an appeals court found in favor of the employer on the charge of racial bias. The trader wasn’t a decision-maker, said the courts. She wasn’t in a position to make an adverse employment decision about her boss. The law is clear on this point: being a bigot may not be nice, but it’s not against the law. It is, however, against the law to deny a person a promotion – or to demote him – because of his race. And that wasn’t why Simmons was demoted.

The court also rejected the treasurer’s claim that the CEO hadn’t objectively evaluated his performance. It was satisfied that Simmons had been demoted because he’d made a bad management decision and then refused to reverse it.

The board made a strong case against racial discrimination in the workplace

The Chicago Board of Education came out on top because it had carefully tracked events leading to Simmons’ demotion. They had the CEO’s letter to Simmons, as well as Simmons’ reply. What’s more, they were able to cite numerous instances where failure to get the treasurer’s pre-approval (for example, when he stepped out of the office for lunch) caused the Board to lose money unnecessarily. In other words, they quantified the negative consequences of his actions.

Bottom line: just because an employee is in a protected class, unpopular and demoted doesn’t mean they’re being racially discriminated against – as long as the facts are on your side and you’ve been diligent about documenting your case.

There’s no law against being a bigot, but it’s a good policy to curb remarks in the workplace. A small investment in sensitivity training could save you a bundle in racial discrimination lawsuit. After all, why give fodder to disgruntled employees and make it any easier for them to sue?

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